Africa Finance & Private Sector Department (AFTFP) has initiated a major research program on Africa’s Industry Competitiveness entitled “Strategies to Leverage the New Global Economy.” The objective of this program is to inform policies and institutional approaches by which African countries can improve their competitiveness to help achieve sustained and inclusive economic growth. The research defines competitiveness as the firms’ ability to enhance its performance in domestic and international markets. Competitiveness is driven by productivity and innovation as well as by factor and transaction costs in host countries.
There is broad agreement that economic growth depends crucially on integration into global markets. Competitive exposure to global good practices contributes in a major way to the improvement of economy-wide total factor productivity and thus to higher living standards. There is also a broad consensus that success on global markets depends on a vibrant private sector, and that government plays a central supporting role in setting rules to promote competition and reduce the cost and risk of doing business. A large body of work on African growth and competitiveness points to the following constraints: lack of market enabling institutions, poor infrastructure, lack of human and social capital, poor governance and recurring political instability.
The research program will be the first research initiative on Africa’s competitiveness to cover the six industry groups accounting for most of the global trade flows:
Due to the comprehensive nature of the research program that will be undertaken, it was decided that the work would be phased. The research will start on light manufacturing component which will be developed jointly with Development Economics Vice Presidency (DEC), followed then by the tourism component.
The research will combine the industry and country dimensions by analyzing each industry group’s performance of a representative sample of countries including benchmarks from outside Africa. It will build on a vast amount of information and analysis available at both the country and industry level.